Statehouse Beat: Racing subsides may be cut

CHARLESTON, W.Va. -- On occasion in this space, I've written about the hundreds of millions of dollars the state spends to subsidize thoroughbred and greyhound racing in the state, suggesting that if times got tough, the Legislature might be compelled to cut off the gravy train.

That could happen as early as this session, with purse and breeders' funds under attack on multiple fronts -- including legislation to be introduced next week that would pare down those funds and restrict how those dollars could be spent.

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Coincidentally, the Lottery Commission has just put out its fiscal 2012 bucket graphic -- which shows how much money it took in from all forms of state-sanctioned gambling ($837.7 million) and how that money was disbursed (displayed as buckets of cash).

Racetrack purses and track funds received a total of $106.6 million, including $56.9 million in thoroughbred purses, $9.1 million in thoroughbred development funds, $20.1 million in greyhound purses, and $5.9 million in greyhound development funds.

Which would suggest the Legislature cares more about horse and greyhound breeders and owners than college students ($29 million for Promise Scholarships), school construction ($18 million for SBA), promoting tourism ($7.4 million) or providing services for senior citizens ($64.8 million).

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A 2011 legislative audit contending that Horsemen's Benevolent Associations at the state's two thoroughbred tracks had been misspending their share of purse funds to hire lawyers and lobbyists, for travel and entertainment and other questionable purposes, has been circulating around the Legislature this session -- an entrée to legislation to be introduced next week to pare back the purse and development funds.

The bill is backed by the operators of the state's four racetrack-casinos, none of which would lose sleep if they became racetrack-less casinos.

Seven months into the 2013 budget year, the casinos' slots and table games revenues are down $57.8 million from the same point last year -- while the Northern Panhandle casinos and Mardi Gras in Nitro are getting hammered by competition from new casinos in Ohio, particularly losing business to the Columbus casino.

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The other front is greyhound racing -- which has been on a steep decline nationally in the past decade, as interest among gamblers has waned and the industry has been under attack from humane associations and anti-racing groups such as GREY2K USA.

The tipping point may have come last month when Jim Simms, general manager of Wheeling Island -- the hardest-hit of the four racetrack casinos -- sought permission to reduce greyhound racing by 14 days a year as a cost-cutting measure, but was permitted by the state Racing Commission to eliminate only seven race days.

That prompted editorials in the Wheeling newspapers and the Daily Mail calling for elimination of the racing subsidies, if not outright elimination of greyhound racing.

"We know of no other type of business that receives subsidies like those awarded to the dog and horse racing industries," the editorial in the Wheeling papers stated. "The breeders funds should be phased out, with money that now flows into them going instead to local and state governments. That could replace some of the revenue lost because of competition from Ohio and Pennsylvania."

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Speaking of the lottery, a couple of weeks ago I wrote that it's hard to feel a lot of sympathy for limited video lottery distributors and retailers who are getting shook down by slots manufacturer IGT to the tune of $20 million of $30 million to upgrade or replace machines, considering that many of those businesses began as illegal gray machine operations.

That prompted a call from a retired law enforcement officer who finds it unsettling that in his home of Harrison County, three of the five biggest limited video lottery (LVL) operations are affiliated with police organizations: Fraternal Order of Police Mountaineer Lodge 78, West Virginia State Lodge FOP, and Blue Knights of West Virginia II.

In January alone, the three lodges cleared $222,184 of profit off of $796,209 of LVL dollar-in.

After spending the 1980s and '90s raiding video gambling establishments, the retired officer said he finds it disconcerting that police organizations are profiting from gambling and drinking. (And possibly, smoking, since the three lodges are backing an effort to stack the membership of the county health department in order to repeal the county's smoking ban ... )

Not to mention the potential embarrassment of having on-duty brethren pull over patrons of the lodges for DUI ...

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Finally, quote of the week: "It was more of a condition of employment than a personal choice." -- Me, explaining to Senate administrative assistant Lynette Maselli why I was on Twitter, some two weeks after telling her I had no intention of ever twittering. Actually, it hasn't been as bad as I envisioned, and if this delve into modern technology goes well, who knows, a cellphone could be in the offing at some point in the future ...

Readers are invited to follow at @PhilKabler. Same clever insights -- just in 140 characters, not 800 words.